Establishing an Information Technology Company in Vietnam for Singaporean Investors

According to statistics from the Ministry of Planning and Investment, in 2023, there were investments from 111 countries and territories in Vietnam. Among them, Singapore led with a total investment of over 6.8 billion USD, accounting for 18.6% of the total foreign investment in Vietnam and an increase of 5.4% compared to the same period in 2022. This indicates that Vietnam is increasingly attracting foreign investment, especially from Singaporean investors. Additionally, the information technology sector is a field that Vietnam has opened up for market competition, allowing Singaporean investors to establish companies with 100% foreign capital in Vietnam. 

So, when Singapore investors establish a company operating in the technology sector in Vietnam, what procedures do they need to follow?  

To establish a company in Vietnam, Singapore investors need to undertake the following steps:  

Step 1: Looking for a business location in Vietnam

The company address is one of the mandatory pieces of information when establishing a company in Vietnam. Singaporean investors need to contact office leasing services to choose a suitable location for their headquarters. 

Currently, office leasing services in major cities in Vietnam, such as Ho Chi Minh City and Hanoi, are highly developed. Singaporean investors can easily find office spaces at various price levels that suit their needs. 

Additionally, Singaporean investors need to sign a Memorandum of Understanding or office leasing contract that records the purpose of the lease, such as " headquarters and implementing project location for the [project name] project.  

Step 2: Determine the Appropriate Investment Capital

For the information technology sector, Vietnamese law does not specify a minimum investment capital requirement for investing in Vietnam. Therefore, Singaporean investors can independently determine the investment capital that matches with their business plan and financial capacity. 

After determining the suitable investment capital, investors need to provide a bank statement with a balance equal to or greater than the planned investment amount to demonstrate financial capability. 

Step 3: Determine the Registered Business Sector

For the information technology sector, in accordance with the WTO commitment schedule and Decision No. 27/2018/QD-TTg regarding Vietnam's economic sectors, Singaporean investors can register the following business sectors to operate in Vietnam:

Step 4: Determine the legal representative of the Vietnamese Company

• When establishing a company in Vietnam, Singaporean investors need to identify an individual to be the legal representative of the Vietnamese Company. 

• The legal representative of the Company has the following rights and obligations: 

  • Is the Company's representative to exercise the rights and obligations arising from business transactions (is the person who signs contracts, Company documents,...); 
  • Act as a representative for the Company to request resolution of civil matters, plaintiffs, defendants, and people with related rights and obligations before the arbitrator or the Court. 
• The Company may have one or more legal representatives. The Company's Charter specifies the number, management titles and rights and obligations of legal representatives.

Step 5: Preparing the necessary documents to establish a company

Singaporean investors need to prepare the following basic documents to apply to establish a company: 

• If the Singapore Investor is an organization: business license, charter, passport of legal representative, bank statement proving financial capacity. 
• If the Singapore Investor is an individual, a passport or bank statement proving financial capacity is required. 

Note: the above documents must be consular, legalized, notarized, and translated into Vietnamese. 

Step 6: Applying for an Investment Registration Certificate

Implementation time: 15 working days. 

Before a Singaporean investor can establish a company in Vietnam, the Singaporean investor needs to apply for an Investment Registration Certificate for the Vietnamese state agency to approve the investment project of the Singaporean investor. 

Step 7: Applying for an Enterprise Registration Certificate

Implementation time: 05 working days. 

After the Singaporean investor is granted an Investment Registration Certificate, the Singaporean investor will apply for an Enterprise Registration Certificate to establish a company. 

Step 8: Engraved Company seal

Singaporean investors will have their company seal engraved after completing the application for a Enterprise Registration Certificate. 

Implementation time: 01 working day. 

Step 9: Carrying out tasks after establishing the company

• Tax declaration for the company: Singaporean investors need to find an accounting unit to support the company in its initial tax declaration and quarterly and annual tax declaration. 

• Capital contribution: Singaporean investors need to contribute the full amount of registered capital within 90 days from the date of issuance of the business registration certificate. 

• Personnel recruitment: Singapore investors can recruit Vietnamese and foreign personnel to work at the Company. However, to employ foreign workers, the Company needs to apply for a work permit for foreign workers. 

Step 10: Operating

Based on our experience, the total time for preparing documents and establishing a company in Vietnam is approximately 2 months. The timeframe can be shortened or extended depending on the investor's document preparation timeline. 

The steps mentioned above are the basic procedures for establishing a company in Vietnam. However, to gain a better understanding of the company structure and an overview of important considerations before and after establishing a company in Vietnam, Singaporean investors should consult a professional law firm for specific and clear advice before deciding to invest in establishing a company in Vietnam. 

With a team of lawyers possessing over 10 years of experience in investment and corporate law, Lexsol is ready to accompany investors by providing in-depth advice and comprehensive legal solutions to successfully implement their overseas investment strategies. 

Contact Lexsol today for professional legal consultation and full guidance on foreign investment procedures in Vietnam.